Use the Following Information Regarding Black Company and Red Company

question 218

Multiple Choice

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Red Company's "cost of goods sold" for 2014 (to the closest dollar) ?"

• A) $222,684
• B) $235,125
• C) $224,580
• D) $214,035

---

Definitions:

Cover

In contracts, especially concerning the sale of goods, the act of obtaining replacement goods or services when a seller fails to fulfill their obligations.

Security Interest

A legal claim or right granted over an asset to secure the payment of a debt or performance of some other obligation.

Contract Breach

An act of breaking the terms set out in a contract, which can result in legal action for enforcement or damages.

Capacity

Refers to the legal ability of a party to enter into a contract.